Toyota Company: Maintaining the Competitive Advantage Research Paper

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Firm’s History

Toyota is a Japanese company that deals in the manufacture of automobiles. It is a multinational company with operations across the world. The company was started in the year 1937 by a man known as Kiichiro Toyoda.

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He had inherited a company that dealt with the creation of automobiles from his father. The company has formed partnerships with other companies such as Hino Motors, Daihatsu, and Lexus to constitute the Toyota Motor Corporation.

Before the formation of this corporation, the Company’s operation in the Toyota Industries had started back in the year 1933.

The first product produced by the company was the Type A Engine that was produced in the year 1934 when the company was still operating under Toyota Industries. It produced a passenger car for the first time in the year 1936. The car was called the Toyota AA (Liker & Meier, 2006).

Firm’s strategy

The company’s strategy is guided by the word KAIZEN, which means continuous and consistence improvement. It aims at continually producing quality products and improving its production each day. Quality production has been essential for the success of Toyota.

The stakeholders of Toyota believe that even the best things can be improved thus they always work towards improvement. Toyota has incorporated innovation in its business strategy in the bid to continuously improve quality production.

In addition, Toyota also integrates differentiation and cost leadership as part of its business strategy (Liker & Meier, 2006).

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This helps the company to reach virtually all classes of customers, including high income earners, middle, as well as low income earners. This strategy facilitates its market segmentation.

Market position

Toyota operates in an industry that is highly competitive. There are many players in the automotive industry, with all of them competing for the largest market share.

Some of the major competitors against Toyota include German Automobile Companies such as Audi, BMW, Mercedes Benz, Volkswagen, and Porsche. It also faces competition from Ford, Chrysler, and Fiat, among other companies.

Despite the competition, Toyota has been able to occupy a leading position in the market. However, its position is constantly threatened by companies such as Mercedes Benz, thus it has to find ways of maintaining and improving its competitive advantage (Liker & Meier, 2006).

Specific Area of Alignment

Toyota is a big company that has a number of businesses. However, the major area of alignment to be addressed in this project will be sale of cars. This also happens to be the core business for Toyota (Liker & Meier, 2006).

The company produces various car varieties targeting different classes of customers. This project will aim at identifying HR methods that can be adopted to improve the Toyota car sale business.

Although Toyota is already performing well in relation to most of its rivals, the competitive pressure is piling up and there is the need to be proactive to maintain its position.

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Human resource being the most valuable assets of any organization will be effective in helping Toyota in its efforts to maintain its leadership position in the market.

Job pricing and compensation package

Every employee needs to be given motivation to increase their productivity. One way to improve employee motivation is through rewards.

Job pricing refers to the methods that are used to determine the amount an employee is to be paid depending on the work they do (Bhattacharyya, 2006).

The employer should consider all relevant factors in determining the amount that the employee needs to be paid. Some of the factors to be considered on top of job performance include skills, knowledge, experience, as well as abilities.

Employees who do a large quantity of work and are highly productive should be paid a higher salary.

This should motivate them to continue working hard. It also acts as a wakeup call for those who are not performing equally well because they feel challenged to also work hard so that they can get a higher salary.

It is important for the HR department to ensure that it considers equity as much as possible in conducting the job pricing and compensation package (Takizawa, 2003).

It is also important to note that a poor compensation package will cause low morale among the employees. The overall effect will be a generally poor performance of the whole organization.

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Current and targeted work processes and KSAs required in achieving organizational objectives

An organization should be able to distinguish its current work processes and forecast the future processes. In Toyota, the current processes include constant improvement through innovation and invention.

The employees are currently paying focus on activities that will enable the organization come up with more improved products to expand its competitive advantage (Gerhart & Rynes, 2003). The company should maintain these processes as it also focuses on the future processes.

The company will need to expand its core business in the future. Toyota should focus on other businesses to diversify its current portfolio.

With the increasing competition in the automotive industry, Toyota might need to improve its other businesses to make up for its core business in case of an unexpected performance that might be caused by the increasing competition or the changing economic environment.

The company should hire employees who have the relevant skills and abilities to diversify the company’s business.

Knowledge, skills, and abilities are very important attributes in any successful company. The employees should have the knowledge, skills, and ability to carry out the activities assigned to them. An employee who has these attributes is able to analyze a job that is assigned to him.

He or she is able to solve problems effectively (Dreher & Dougherty, 2002). This ability helps in achieving the organization’s strategy. An organization cannot achieve its strategy without competent employees. The HR should ensure that it hires the right employees who have the above attributes.

Relevant technology considerations to achieve work output in the context of the organization’s goals

Technological advancements in the 21st century have dominated most business organizations. Most people are adopting technology to improve their performance and productivity, as well as increase their competitive advantage.

It is important to note that increasing productivity is considered to be one of the most critical objectives of any business organization. It is considered to be the activity that should always be performed by the HR professionals.

The major business strategy for Toyota is to constantly improve its production. This is only possible through constant innovation (Aswathappa, 2005). Technology plays a major role in innovation.

Therefore, employees need to be given unlimited access to technology so that they can be able to innovate and increase their productivity.

Technology should be enhanced so that it is adaptable to the work performed at Toyota. Proper technological resources will provide ample support to the employees. This will help the employees perform better and improve the general productivity of the organization.

Technology should facilitate integration of the jobs performed by employees, increase collaboration, accountability, as well as responsibility and excellence. These attributes will increase the morale of employees and become the pillars of their success.

It is worth noting that innovative employees form the foundation of organizational productivity. Employees will only be innovative if they are provided with unlimited technology.

When employees are given the chance and the platform to innovate, their morale is boosted and the overall productivity is increased. This is a step that will also be effective in the bid to achieve the organization’s goals.

Some of the technology considerations that can be adopted to increase the output of Toyota would be to implement production equipment that has the ability to increase the unit production.

It is imperative to note that high level of production will be effective in ensuring that the organization achieves its major objectives. The objective of every business organization is to maximize profits. One way to maximize profits is through increasing production.

Therefore, the organization should focus on the technology that has the ability to increase its current production. In addition, the organization can consider technology that will enhance its staffing system (Aswathappa, 2005).

As mentioned earlier, human resources are the most valuable assets in business organizations. Implementing an effective staffing system will help the organization in its competition battle.

Such a staffing system will enable the company to recruit top talents and retain them in the organization for a longer period. Technology should be a major consideration when implementing an effective staffing system.

The technology implemented in the staffing system should be able to support recruitment, planning, and help the organization achieve its goals, which are to satisfy and respect its customers and improve its performance constantly (Dreher & Dougherty, 2002).

Labor market and the appropriate labor law context

An organization should ensure that it has enough supply of employees to boost its chances of succeeding in the current business environment. It should further ensure that it has the right employees who have the ability to perform the duties they are assigned.

Hence, top talents will be more appropriate. Getting top talents is not easy because they are in high demand. Every employer wants to get the best talents who have the ability to improve the performance of their organization and give the organization a competitive edge.

Highly talented employees will facilitate an increase in productivity of the organization. They will also facilitate innovation and technological development. It should be noted that innovation is a source of competitive advantage for any organization.

The labor market of an organization depends highly on its ability to attract new employees, retain the existing employees, and effectively motivate them. The organization needs to embark on a number of factors to maintain and attract employees in the current business environment.

For instance, one of the major incentives for new and talented employees is the remuneration given (Dreher & Dougherty, 2002).

The fact that Toyota is an organization that is strong in terms of finances means that it is able to pay good salary packages for the top talents, thus it has good access to the labor market. Its treatment of employees also attracts more potential employees and broadens its labor market further.

The organization should ensure that it adheres to the labor laws that govern it. The labor laws may differ depending on the location of the organization. In other words, each nation has its own different laws that may be different from those in other countries (Campbell & Campbell, 2008).

Regardless of whether an organization is a multinational or not, it has to adhere to the labor laws in each of the countries where it has operations. One of the labor laws that have been implemented in the United States of America is the Bona fide occupational qualifications (BFOQ).

This is an employment law in the US that requires employers to consider a number of attributes before hiring or retaining an employee. These are qualities that are likely to constitute discrimination, which is a violation of employment rights.

It is important in this discussion since there are many employees who have such attributes and a company might find itself in problems being accused of discrimination if it does not consider this law.

This might lead to a disparate treatment where an underperforming employee with such attributes is retained for the company’s fear to be accused of discrimination by laying the employee off (Twomey, 2010).

Other labor laws that are important include laws relating to job termination. Employees should be protected from unfair job terminations. The employer should have the right justifications before terminating an employee.

In addition, the employer should give the employee whose job is to be terminated all his or her dues.

The employer should further follow the right procedures in terminating the job. In the European countries, there are restrictions to job termination that are meant to protect the employee from unfair treatment.

For instance, employers should give an advance notice to employees about termination. All amounts related to the job termination should be paid. These conditions are beneficial to the employees since it is argued that incumbents are less likely to lose their jobs.

However, it is not easy for new employees to be hired in such conditions. Multinational organizations are required to follow these guidelines strictly and implement them in their HR policies. There are organizations that have already adopted these laws.

Among them include Toyota, Wal-Mart, American Broadcasting Company, the Coca- Cola Company, and the Bushmaster Firearms International.

Recommendations

Toyota Company is facing stiff competition from companies such as Audi, and Mercedes Benz, among others. It should, therefore, come up with strategies that will enable it to overcome the competition and maximize its profitability.

The management should improve its HR department to get the best out of its employees. It should also adopt technology in its processes. Technology is known to improve efficiency and the general production. The company should also ensure that it adheres to all the labor laws that govern it.

This will avoid lawsuits that may arise relating to breach of such laws. Lawsuits are expensive and they reduce the organization’s profitability. They are also likely to affect the reputation of the company and tarnish its brand name, leading to loss of customers to competitors.

Toyota will be in a better position to maintain its competitive advantage if it embraces these concepts, as well as any other relevant strategy.

References

Aswathappa, K. (2005). Human resource and personnel management: Text and cases. New Delhi, India: Tata McGraw-Hill.

Bhattacharyya, D. K. (2006). Human resource planning. New Delhi, India: Excel Books.

Campbell, D., & Campbell, C. T. (2008).Legal aspects of doing business in Europe. Salzburg, Austria: Yorkhill Law Publishing.

Dreher, G., & Dougherty, T. (2002). Human resource strategy: A behavioral perspective for the general manager Boston, MA: McGraw-Hill/Irwin

Gerhart, B. A., & Rynes, S. (2003). Compensation: Theory, evidence, and strategic implications. Thousand Oaks, CA: Sage.

Liker, J. K., & Meier, D. (2006). The Toyota way fieldbook: A practical guide for implementing Toyota’s 4Ps. New York, NY: McGraw-Hill.

Takizawa, H. (2003). Job-specific investment and the cost of dismissal restrictions: the case of Portugal. Washington, D.C: International Monetary Fund.

Twomey, D. P. (2010). Labor & employment law: Text & cases. Mason, OH: South-Western Cengage Learning.

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